B-164736, DEC. 2, 1968

B-164736, DEC. 2, 1968

TO WARREN PAINTING COMPANY, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER DATED JUNE 25, 1968, AND TO SUBSEQUENT CORRESPONDENCE, CONCERNING YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO THE STEENMEYER CORPORATION, BELLINGHAM, WASHINGTON, UNDER INVITATION FOR BIDS NO. DACA85-68-B-0081, ISSUED JUNE 10, 1968, BY THE UNITED STATES ARMY ENGINEER DISTRICT, ALASKA, FOR THE EXTERIOR PAINTING OF 49 BUILDINGS AT FORT WAINWRIGHT, ALASKA.

THE INVITATION FOR BIDS CONTAINED SCHEDULES A AND B UNDER WHICH THE STEENMEYER CORPORATION, THE LOW BIDDER, QUOTED LUMP-SUM PAINTING PRICES AGGREGATING THE SUM OF $201,502, AND UNIT PRICES AGGREGATING THE SUM OF $4,575 FOR MASONRY JOINT REPAIR ON 25 OF THE 49 BUILDINGS, BASED UPON AN ESTIMATED QUANTITY OF 5,000 LINEAL FEET OF MASONRY JOINT REPAIR FOR EACH OF THE 25 BUILDINGS. FOR THE MASONRY JOINT REPAIR WORK, THE STEENMEYER CORPORATION QUOTED A PRICE OF $0.045 PER LINEAL FOOT ON 11 OF THE 23 BUILDINGS LISTED IN SCHEDULE A AND ON 8 OF THE 26 BUILDINGS LISTED IN SCHEDULE B. THE STEENMEYER CORPORATION QUOTED A PRICE OF $0.01 PER LINEAL FOOT ON 6 OF THE BUILDINGS LISTED IN SCHEDULE B. AS COMPARED WITH THE TOTAL BID OF $206,077, SUBMITTED BY THE STEENMEYER CORPORATION, YOU SUBMITTED PRICES AGGREGATING THE AMOUNT OF $283,126, INCLUDING $173,126 FOR PAINTING AND $110,000 FOR MASONRY JOINT REPAIR AS TO WHICH YOU QUOTED A PRICE OF $0.88 PER LINEAL FOOT ON THE TOTAL ESTIMATED QUANTITY OF 125,000 LINEAL FEET OF MASONRY JOINT REPAIR. THE THREE OTHER BIDDERS QUOTED PRICES OF $0.35, $0.70 AND $1.50 PER LINEAL FOOT OF MASONRY JOINT REPAIR, AND THE GOVERNMENT'S ESTIMATE OF A REASONABLE CHARGE FOR SUCH WORK WAS $0.62 PER LINEAL FOOT.

AFTER OPENING OF THE BIDS ON JUNE 20, 1968, THE SCHEDULED BID OPENING DATE, YOU QUESTIONED THE REASONABLENESS OF THE GOVERNMENT'S QUANTITY ESTIMATES FOR REQUIRED MASONRY JOINT REPAIR ON 25 OF THE 49 BUILDINGS TO BE PAINTED. YOU CONTENDED THAT THE REQUIRED MASONRY JOINT REPAIR WORK WOULD AMOUNT ONLY TO ABOUT 1,500 LINEAL FEET AND THAT THE STEENMEYER CORPORATION HAD SUBMITTED AN UNBALANCED BID WITH KNOWLEDGE OF THE FACT THAT THE GOVERNMENT'S QUANTITY ESTIMATES WERE NOT REALISTIC. YOU STATED THAT YOUR BID WOULD HAVE BEEN FROM $30,000 TO $40,000 LOWER THAN THE BID OF THE STEENMEYER CORPORATION IF MORE ACCURATE QUANTITY ESTIMATES HAD BEEN STATED IN THE INVITATION FOR BIDS AND USED IN MAKING BID EVALUATIONS. YOU SUBSEQUENTLY SUBMITTED A STATEMENT CONCERNING A SURVEY MADE BY YOUR REPRESENTATIVES ON JUNE 23, 1968, PURPORTING TO SHOW THAT ONLY THE APPROXIMATE QUANTITY OF 1,217 LINEAL FEET OF MASONRY JOINT REPAIR WOULD BE REQUIRED, THAT THERE ARE APPROXIMATELY 195,563 LINEALFEET OF MORTAR JOINTS ON THE 11 BUILDINGS OF SCHEDULE A, INDICATED AS REQUIRING MASONRY JOINT REPAIR, AND THAT THERE ARE APPROXIMATELY 52,141 LINEAL FEET OF MORTAR JOINTS ON THE 14 BUILDINGS OF SCHEDULE B, INDICATED AS REQUIRING MASONRY JOINT REPAIR.

WE REQUESTED AND RECEIVED A REPORT ON YOUR PROTEST FROM THE DEPARTMENT OF THE ARMY. A COPY OF THE BASIC DEPARTMENTAL REPORT, TOGETHER WITH A COPY OF AN ACCOMPANYING REPORT OF THE CONTRACTING OFFICER ON YOUR PROTEST, WAS FURNISHED TO YOU BY LETTER DATED AUGUST 27, 1968, SINCE YOU HAD INDICATED THAT YOU MIGHT DECIDE TO INITIATE AN INDEPENDENT RESURVEY OF THE PROJECT AFTER BEING ADVISED OF THE DEPARTMENT OF THE ARMY'S POSITION IN THE MATTER. IT WAS INDICATED IN THE CONTRACTING OFFICER'S REPORT THAT, BEFORE AWARDING A CONTRACT TO THE STEENMEYER CORPORATION DURING THE LATTER PART OF THE MONTH OF JUNE 1968, THE CONTRACTING OFFICER OBTAINED INFORMATION FROM THE USING AGENCY THAT ITS ESTIMATES OF MASONRY JOINT REPAIR QUANTITIES ON 16 OF THE SCHEDULE A AND B BUILDINGS WERE SUBSTANTIALLY CORRECT, THAT THE AMOUNT OF MASONRY JOINT REPAIR REQUIRED ON 3 BUILDINGS OF SCHEDULE B HAS BEEN OVERESTIMATED BECAUSE THE SIZES OF THOSE BUILDINGS WERE MISCALCULATED AND THAT NO MASONRY JOINT REPAIR APPEARED TO BE REQUIRED ON 6 OF THE BUILDINGS OF SCHEDULE B. IT APPEARS THAT THE USING AGENCY THEN ESTIMATED THAT A TOTAL QUANTITY OF 5,000 LINEAL FEET OF MASONRY JOINT REPAIR WOULD BE REQUIRED ON 3 SCHEDULE B BUILDINGS, THAT A TOTAL QUANTITY OF 25,000 LINEAL FEET OF MASONRY JOINT REPAIR WOULD BE REQUIRED ON 5 SCHEDULE B BUILDINGS AND THAT A TOTAL QUANTITY OF 55,000 LINEAL FEET OF MASONRY JOINT REPAIR WOULD BE REQUIRED ON 11 SCHEDULE A BUILDINGS. IN THAT CONNECTION, IT WAS REPORTED THAT THE TOTAL QUANTITY OF REQUIRED MASONRY JOINT REPAIR WOULD BE AT LEAST 85,000 LINEAL FEET.

THE ORIGINALLY ESTIMATED TOTAL QUANTITY OF REQUIRED MASONRY JOINT REPAIR (125,000 LINEAL FEET, OR 5,000 LINEAL FEET FOR EACH OF 25 BUILDINGS), WOULD HAVE HAD TO BE REDUCED TO THE APPROXIMATE QUANTITY OF 41,515 LINEAL FEET BEFORE YOUR BID COULD HAVE BEEN CONSIDERED LOWER THAN THAT OF THE STEENMEYER CORPORATION. THE STEENMEYER CORPORATION QUOTED A PRICE OF $0.045 PER LINEAL FOOT FOR MASONRY JOINT REPAIR REQUIRED ON 11 SCHEDULE A BUILDINGS AND 8 SCHEDULE B BUILDINGS, AND YOU OFFERED TO ALLOW A REDUCTION OF 3 PERCENT FROM THE TOTAL OF YOUR PRICES ON SCHEDULES A AND B IF YOU RECEIVED AN AWARD COVERING BOTH SCHEDULES. ON THE BASIS OF AN ESTIMATED TOTAL QUANTITY OF 41,515 LINEAL FEET OF REQUIRED MASONRY JOINT REPAIR WORK ON THE 19 BUILDINGS, THE TWO BIDS WOULD HAVE BEEN EVALUATED AS FOLLOWS:

STEENMEYER WARREN

BID BID

----------- ----------- SCHEDULE A LUMP-SUM PAINTING PRICES $135,259.00 $109,211.00 SCHEDULE B LUMP-SUM PAINTING PRICES 66,243.00 63,915.00 MASONRY JOINT REPAIR PRICES

41,515 LINEAL FEET $0.045 PER

LINEAL FOOT $ 1,868.18

41,515 LINEAL FEET $0.88 PER

LINEAL FOOT $ 36,533.20

TOTALS $203,370.18 $209,659.20 LESS: 3 PERCENT ON TOTAL WARREN

BID PRICE $ 6,289.78

----------- ----------- NET TOTAL AMOUNTS OF THE TWO BIDS $203,370.18 $203,369.42

THE DEPARTMENT OF THE ARMY CITED 38 COMP. GEN. 572, IN WHICH OUR OFFICE DETERMINED THAT AN UNBALANCED BID PROPERLY WAS CONSIDERED BY THE DEPARTMENT OF THE NAVY TO BE ACCEPTABLE SINCE THERE WAS NO REASON TO BELIEVE THAT THE PURPOSE OF QUOTING EXCEPTIONALLY LOW PRICES ON CERTAIN OPTIONAL ADDITIVE ITEMS WAS TO GAIN AN ADVANTAGE OVER OTHER BIDDERS. THE DEPARTMENT OF THE ARMY STATED WITH REFERENCE TO THE STEENMEYER CORPORATION'S BID THAT THERE IS NO PROOF OF ANY IRREGULARITY OF SUCH SUBSTANTIAL NATURE WHICH AFFECTED FAIR AND COMPETITIVE BIDDING.

SINCE A RESURVEY OF THE PROJECT BY AN INDEPENDENT GROUP OF SURVEYORS PROBABLY WOULD RESULT IN AN EXPENDITURE BY YOUR COMPANY OF A SUBSTANTIAL AMOUNT, YOU WERE ADVISED IN OUR LETTER OF AUGUST 27, 1968, THAT IT IS OUR POLICY TO ACCEPT ADMINISTRATIVE STATEMENTS OR DETERMINATIONS ON DISPUTES CONCERNING QUESTIONS OF FACT IN THE ABSENCE OF CLEAR AND CONVINCING EVIDENCE TO SHOW THAT THE ADMINISTRATIVE DETERMINATIONS ARE NOT REASONABLE. REFERENCE WAS ALSO MADE TO THE POSSIBILITY THAT WE MIGHT FIND NO BASIS TO SUPPORT A CONCLUSION THAT THE AWARD TO THE STEENMEYER CORPORATION WAS NOT MADE IN GOOD FAITH, EVEN IF THE ACTUAL QUANTITIES OF REQUIRED MASONRY JOINT REPAIR WORK PROVED TO BE CONSIDERABLY LESS THAN THE ESTIMATED QUANTITIES; AND TO THE POSSIBILITY THAT CANCELLATION OF THE CONTRACT ON GROUNDS OTHER THAN A LACK OF GOOD FAITH IN MAKING THE AWARD MIGHT NOT BE CONSIDERED TO BE IN THE BEST INTERESTS OF THE GOVERNMENT SINCE, IN ALL PROBABILITY, A CONSIDERABLE AMOUNT OF THE PAINTING WORK WOULD HAVE BEEN PERFORMED BEFORE A DECISION REQUESTING CANCELLATION COULD BE RENDERED. YOU WERE FURTHER ADVISED THAT, IN VIEW OF FUNDING REQUIREMENTS, THERE EXISTS A QUESTION WHETHER CANCELLATION OF THE CONTRACT WITH THE STEENMEYER CORPORATION WOULD RESULT IN A SITUATION WHERE A CONTRACT COULD BE AWARDED TO YOUR COMPANY FOR THE UNCOMPLETED PAINTING WORK ON THE BASIS OF ITS BID PRICES UNDER THE PARTICULAR INVITATION FOR BIDS.

YOU SUBMITTED YOUR COMMENTS ON THE DEPARTMENTAL REPORT AND THE CONTRACTING OFFICER'S REPORT IN A LETTER DATED SEPTEMBER 9, 1968, CONTENDING THAT THERE IS NO BASIS FOR CONSIDERING THAT AT LEAST 85,000 LINEAL FEET OF MASONRY JOINT REPAIR WOULD BE REQUIRED AND THAT THERE IS IN THIS CASE A CLEAR INDICATION THAT THE AWARD TO THE STEENMEYER CORPORATION WAS NOT MADE IN GOOD FAITH.

YOU STATE THAT THE TOTAL ESTIMATED QUANTITY OF REQUIRED MASONRY JOINT REPAIR ON 14 SCHEDULE B BUILDINGS (70,000 LINEAL FEET), WAS NOT ONLY EXCESSIVE, BUT RIDICULOUS, SINCE THE BUILDINGS HAD ONLY A TOTAL OF 52,141 LINEAL FEET OF EXISTING MORTAR JOINTS. WITH RESPECT TO THE DELETION OF REQUIRED MASONRY JOINT REPAIR ON 6 OF THOSE BUILDINGS, YOU INDICATE THAT THE REMAINING 8 BUILDINGS, INDICATED IN SCHEDULE B AS REQUIRING MASONRY JOINT REPAIR, CONTAIN ONLY 43,459 LINEAL FEET OF MORTAR JOINTS, AS COMPARED WITH A TOTAL ESTIMATE OF 40,000 LINEAL FEET OF JOINT MASONRY REPAIR ON THOSE BUILDINGS. YOU DO NOT REFER TO THE APPARENT REVISIONS AMOUNTING TO 10,000 LINEAL FEET OF MASONRY JOINT REPAIR IN CONNECTION WITH THE ORIGINAL ESTIMATES CONCERNING 3 OF THE 8 BUILDINGS. WITH THOSE REVISIONS, THE TOTAL ESTIMATE FOR REQUIRED MASONRY REPAIR ON THE 8 BUILDINGS WOULD AMOUNT TO 30,000 LINEAL FEET, OR 25,000 LINEAL FEET FOR 5 OF THE BUILDINGS AND 5,000 LINEAL FEET FOR 3 OF THE 8 BUILDINGS THE SIZES OF WHICH HAD BEEN MISCALCULATED WHEN PREPARING THE ORIGINAL MASONRY JOINT REPAIR ESTIMATES.

YOU ALSO STATE THAT YOU WOULD LIKE TO KNOW HOW THERE WOULD BE IN EXCESS OF 85,000 LINEAL FEET OF MASONRY JOINT REPAIR ON BUILDINGS AS TO WHICH THE TOTAL OF EXISTING MORTAR JOINTS IS 79,352 LINEAL FEET. WE DO NOT KNOW THE BASIS FOR THE 79,352 LINEAL-FEET FIGURE. THE ABOVE REFERRED-TO QUANTITY OF 43,459 LINEAL FEET OF MORTAR JOINTS ON 8 OF THE SCHEDULE B BUILDINGS AGREES WITH YOUR PREVIOUS CALCULATIONS. HOWEVER, YOUR PREVIOUS CALCULATIONS INDICATED THAT THERE ARE APPROXIMATELY 195,563 LINEAL FEET OF EXISTING MORTAR JOINTS ON THE 11 SCHEDULE A BUILDINGS WHICH WERE LISTED AS REQUIRING MASONRY JOINT REPAIR. THUS, IN ACCORDANCE WITH YOUR OWN CALCULATIONS, THE 19 BUILDINGS REQUIRING MASONRY JOINT REPAIR HAVE APPROXIMATELY 239,022 LINEAL FEET OF MORTAR JOINTS, OR APPROXIMATELY THREE TIMES THE PRESENTLY STATED TOTAL AMOUNT OF 79,352 FEET OF MORTAR JOINTS.

WE AGREE THAT THERE EXISTS A SUBSTANTIAL QUESTION WHETHER THE ESTIMATED AMOUNTS OF JOINT MASONRY REPAIR NORMALLY WOULD AMOUNT TO A HIGH PERCENTAGE OF THE QUANTITY OF MORTAR JOINTS IN BUILDINGS WHICH ARE TO BE PAINTED, BUT IT IS APPARENT THAT THE ESTIMATES COULD VARY TO A CONSIDERABLE EXTENT DEPENDING UPON THE CONDITION OF THE BUILDINGS AND A REASONABLE OPINION AS TO WHAT WOULD BE THE OVERALL EFFECT OF SANDBLASTING BEFORE PAINTING. THAT CONNECTION, YOU RAISE THE QUESTION WHETHER IT WOULD HAVE BEEN UNSAFE FOR THE BUILDINGS TO BE OCCUPIED IF THE AMOUNT OF THE REQUIRED MASONRY JOINT REPAIR IS AS HAS BEEN ESTIMATED BY THE USING AGENCY. APPARENTLY THE CONDITION OF 19 OF THE BUILDINGS OF SCHEDULES A AND B WAS CONSIDERED TO BE SUCH AS TO REQUIRE EXTENSIVE REPAIR OF THE MASONRY JOINTS BEFORE PAINTING, BUT WHETHER THE BUILDINGS WERE UNSAFE FOR OCCUPANCY DOES NOT APPEAR TO BE MATERIAL IN DETERMINING THE MERITS OF YOUR PROTEST.

YOUR LUMP-SUM PAINTING PRICES FOR 6 OF THE SCHEDULE B BUILDINGS, ORIGINALLY INDICATED AS REQUIRING MASONRY JOINT REPAIR BUT LATER DETERMINED AS NOT REQUIRING ANY SUCH WORK, WERE ONLY IN THE AMOUNTS OF $17 EACH AND IT APPEARS THAT ONLY THE DOORS OF THOSE BUILDINGS WERE TO BE PAINTED. FOR THE 3 BUILDINGS OF SCHEDULE B AS TO WHICH THE REVISED TOTAL ESTIMATE FOR MASONRY JOINT REPAIR WAS 5,000 LINEAL FEET, YOUR LUMP-SUM PAINTING PRICES WERE IN THE AMOUNTS OF $117, $138 AND $432. IN VIEW OF YOUR RELATIVELY LOW PAINTING PRICES ON THOSE 9 BUILDINGS, AND SIMILARLY LOW PAINTING PRICES QUOTED BY OTHER BIDDERS WITH RESPECT TO THOSE BUILDINGS, IT WOULD APPEAR THAT ALL BIDDERS SHOULD HAVE REALIZED THAT THERE WAS VERY LITTLE, IF ANY, REQUIRED MASONRY JOINT REPAIR TO BE PERFORMED ON 6 OF THE BUILDINGS AND THAT THE AMOUNT OF JOINT MASONRY REPAIR REQUIRED TO BE PERFORMED ON THE REMAINING 3 BUILDINGS COULD NOT HAVE AMOUNTED TO 15,000 LINEAL FEET, OR 5,000 LINEAL FEET PER BUILDING.

THE USING AGENCY INDICATED THAT THE REVISED TOTAL ESTIMATE OF REQUIRED MASONRY JOINT REPAIR ON 11 SCHEDULE A BUILDINGS AND 8 SCHEDULE B BUILDINGS (85,000 LINEAL FEET) WAS BASED ON PAST EXPERIENCE AT FORT GREELY AND IT APPEARS THAT, EVEN IF THE ESTIMATE WAS EXCESSIVE AS YOU CONTEND, IT WOULD BE DIFFICULT TO ESTABLISH THAT THE USING AGENCY DID NOT ACT IN GOOD FAITH WHEN IT REPORTED TO THE CONTRACTING OFFICER AFTER OPENING OF BIDS THAT THE ORIGINAL ESTIMATES FOR REQUIRED JOINT MASONRY REPAIR ON 16 SCHEDULE A AND SCHEDULE B BUILDINGS WERE SUBSTANTIALLY CORRECT, AND THAT, WITH THE CONSIDERATION OF REVISIONS CONCERNING 3 OF THE SCHEDULE B BUILDINGS, THE TOTAL QUANTITY OF THE REQUIRED MASONRY JOINT REPAIR WORK ON 19 BUILDINGS WOULD AMOUNT TO AT LEAST 85,000 LINEAL FEET. YOU HAVE SUGGESTED THAT WE INVESTIGATE THE REASONABLENESS OF THE GOVERNMENT'S QUANTITY ESTIMATES FOR REQUIRED MASONRY JOINT REPAIRS ON 19 OF THE SCHEDULE A AND B BUILDINGS AND THAT YOU BE PERMITTED TO VISIT THE JOB SITE WITH OUR REPRESENTATIVE. HOWEVER, IT DOES NOT APPEAR THAT ANY USEFUL PURPOSE WOULD BE SERVED BY SUCH AN INVESTIGATION AT THIS TIME. THE CONTRACT WAS AWARDED TO THE STEENMEYER CORPORATION DURING THE LATTER PART OF THE MONTH OF JUNE 1968 AND, PRESUMABLY, THE CONTRACTOR HAS ALREADY PERFORMED THE PAINTING WORK REQUIRED ON SEVERAL OF THE 49 BUILDINGS OF SCHEDULES A AND B. IT WOULD THEREFORE NOT BE IN THE BEST INTERESTS OF THE GOVERNMENT TO CANCEL THE CONTRACT UNLESS IT COULD BE ESTABLISHED THAT THE CONTRACT AWARD WAS NOT MADE IN GOOD FAITH. THERE IS NO SUBSTANTIAL BASIS ON THE EXISTING RECORD FOR SUCH CONCLUSION. IN THE PARTICULAR CIRCUMSTANCES, A CANCELLATION OF THE CONTRACT WOULD NOT BE PROPER EVEN IF WE DETERMINED THAT THE REVISED ESTIMATES FOR JOINT MASONRY REPAIR ON 19 OF THE SCHEDULE A AND B BUILDINGS, INDICATED BY THE USING AGENCY AS AMOUNTING TO AT LEAST 85,000 LINEAL FEET, WERE NOT REALISTIC.

ACCORDINGLY, YOUR PROTEST IN THE MATTER IS HEREBY DENIED. HOWEVER, AS THE RESULT OF THE PROTEST WE ARE POINTING OUT, BY LETTER OF TODAY TO THE SECRETARY OF THE ARMY, THE NEED FOR THE DEPARTMENT OF THE ARMY TO TAKE APPROPRIATE ACTION TO INSURE THAT IN FUTURE CASES OF THIS NATURE BID INVITATIONS WILL PROVIDE REASONABLY ACCURATE ESTIMATES FOR WORK TO BE PERFORMED ON A UNIT PRICE BASIS SO THAT FAIR AND REASONABLE BID EVALUATIONS CAN BE MADE ON COMBINATIONS OF LUMP-SUM AND UNIT PRICE QUOTATIONS.